The project would convert the industrial building in Rockford into apartments
ROCKFORD – Urban Equity Properties is seeking a forgivable $ 490,873 loan from the city and property tax incentives to promote the redevelopment of an abandoned industrial building into luxury loft apartments on South Main Street.
There are plans to convert a “dangerous and abandoned” industrial building into a US $ 19.3 million 60-unit apartment complex known as “The” Hydropower lofts, 700 S. Main St. The building was once the headquarters of the Rockford Brass Works Company, founded in 1890.
Alderman Chad Tuneberg, R-3, said that given the company’s track record in successful reorganization, including the Burnham Lofts, 202 W. State St., the Residences in Talcott, 321 W. State St., and many others he supports the incentives.
Those buildings, Tuneberg said, were dark and mostly empty before they were redeveloped by Urban Equity Properties.
“Our city center is shining brightly again and I have full confidence that this can help,” said Tuneberg.
The city council is considering a development agreement with the incentives.
They contain provisions for refunds of tax increases for financing, which cover the costs of development costs from the increased property taxes that arise from the development. These refunds could run to $ 5 million over 17 years, depending on the property’s valuation.
And it also includes a forgivable loan that would be paid out of the city’s redevelopment fund – a 1% tax on hotel stays, restaurant bills, and bar tabs that are used to subsidize the city BMO Harris Bank Center and redevelopment of the city center.
Officials said investing in the redevelopment project was an appropriate use of the proceeds from the redevelopment fund.
Tuneberg said if not for the development itself, property taxes would not be available to incentivize the project.
“There wouldn’t even be an increase without such a development progressing,” said Tuneberg. “It is money that can be argued to be paid out by the city. But that is money that would never have come into the city if such developments had not taken place.”
The loan would be paid out in two installments, the first after the financing was completed and the other half after the construction was completed. The developer would have to repay the loan if the project did not go according to the contract, otherwise it would be waived over 10 years.
In addition to urban incentives, the redevelopment project will be funded with a mix of private equity, traditional funding and historic tax credits, which means that the redevelopment must be subject to strict regulations that respect and restore its historic character.
56 one-bedroom apartments would be rented for about $ 1,000 per month and four two-bedroom apartments on the top floor for about $ 1,400 per month. They have high ceilings, gourmet kitchens, polished concrete floors and corrugated concrete pillars, plus amenities like a fitness center, rooftop terrace, and tenant lounge. The project is expected to take around 36 months.
It comes after Urban Equity Properties broke ground last week for the $ 6.5 million five-story apartment building 301, which is slated to be the first downtown multi-story development in decades at the former location of the Hanley Furniture Building, 301 S. Main St. will be .
Combined with Embassy Suites and its own projects, Urban Equity Properties is betting that South Main will become the next hip neighborhood in downtown. They call it the Water Power District in honor of its roots as the city’s energy producer.
Without urban incentives, funding the Water Power Lofts project would be impossible, said Jeff Orduno, chief operating officer of Urban Equity Properties.
“Without this additional funding, the project would not be mathematically viable,” said Orduno. “We are excited to spread the development along South Main Street, especially this particular building that is serving as a nuisance to anyone moving north from the airport to downtown. We see it as something that will be an anchor for this neighborhood could, so that we can “spread further south from there.”